Everyday Economics

California State Standard 12.1: Students understand common economic terms and concepts and economic reasoning.

Learning Objective: The purpose of this lesson is to introduce basic economic terms and have students understand what economics is, why we study it, and importance of economics in both the world and their everyday lives using real life examples.

iPhone 5 Galaxy SIII

• $199 with 2 year contract• Apple / iOS• LTE• Siri• Slim, compact design• 7.6mm thick, metal casing,

non-removable battery• Overall better camera (front-

facing HCD better low-light performance)

• Siri• Available in black and white• Restricted file transfers• More games

• Cheaper than the iPhone! • Android• LTE• S voice• More memory • Wider display• Longer battery life• 8.6mm thick, plastic casing,

removable battery

• Available in white, black, blue, red, grey and brown

• Free file transfer • Better media player

Apple iPhone 5 VS. Samsung Galaxy S III: Which is better?

What is Economics?

Economics is the study of choices that people make to satisfy their needs and wants. Economics is a social science. It

focuses on human behavior!

Why is it important? You can’t have it all, so you

must make choices! Economics is highly relevant to

every aspect of your life.

Some Principles of Economic Thinking…

Individuals act to make themselves as well off as possible

Everything has a cost

All actions have consequences (intended / unintended)

People’s choices influence the value of goods and services

2 kinds of Economics

Microeconomics is the study of choices made by individual economic actors (households, companies, individual markets).

Macroeconomics is the study of the behaviors of entire economies (all the sectors of the US economy) Looking at the decision-making of an

economy as a whole Examples of macroeconomic topics:

unemployment, inflation, deflation, national output (GDP)…

Economic Decision-makers Consumers are people who

decide to buy things based on needs and wants.

Producers are the people who make things that satisfy consumers’ needs and wants

Simply said, consumers choose what to buy, and producers choose what to provide and how to provide it.

This is the basis of all economic systems!

How do you make decisions?

Based on goods and services or simply products.

Goods are physical objects that can be purchased.

Services are actions or activities performed for a fee.

Some other examples?

Economic Resources

A resource is anything that people use to make or obtain what they need or want. In other words, resources are needed to produce the goods and services consumers want.

Resources are also called Factors of production A resource is only a factor of production when it is scarce or

limited.

Factor #1: Natural Resources

Items provided by nature to produce goods and services.

Only considered a factor of production when it is scarce and some payment is necessary for its use.

Is air a natural resource?

Factor #2: Human Resources

Any human effort used during production. Intellectual or physical

Factor #3: Capital Resources

Any man-made good produced and used to make other goods and services.

Capital resources = CAPITAL GOODS + MONEY SPENT TO BUY CAPITAL GOODS

Capital vs. Consumer goods

Business use VS. personal use

Some products can be either capital goods or consumer goods, depending on how they are used!

Technology as a capital good (technology for business use) Technology is the use of

technical knowledge and methods to create new products or make existing products more efficiently.

Factor #4: Entrepreneurship

The combination of organizational abilities and risk taking involved in starting a new business / creating a new product.

Goal: To make something of value (whether it be a good or service) to maximize profits

An entrepreneur must develop a new mix of the 4 factors of production to create a valuable product.

Class Activity:

Groups of 3-4

Relate at least 7 key terms to a Lakers game at the Staples Center.

Some questions to think about… Who are the consumers /

producers? What kinds of goods / services

are provided? What factors of production are

considered before, during and after a basketball game?